US Stock Futures Pare Gains After PPI, NY Fed Data; DJIA Up 15

KristinaPeterson

NEW YORK (MarketWatch) -- U.S. stock futures pared early gains on Thursday after a flurry of economic data reflected a mixed picture of U.S. economic health.

The Federal Reserve Bank of New York's survey showed slowing growth in manufacturing activity in July and producer price indexes fell more than expected last month, overshadowing a bigger-than-expected drop in weekly jobless claims. The market had climbed earlier following encouraging earnings from J.P. Morgan Chase.

After the economic reports, Dow Jones Industrial Average futures were up 15 points to 10321, while Standard & Poor's 500-share futures edged up 2 points to 1093 and Nasdaq 100 futures added 4 points to 1855. Prior to the data, Dow futures had been up 44 points, S&P 500 futures were up 6 points and Nasdaq futures had climbed 10 points. Stock futures do not always accurately predict market moves after the opening bell.

The Federal Reserve Bank of New York's Empire State Manufacturing Survey showed the region's manufacturing activity is expanding in July but at a much slower pace than in June or May. The Empire State's business conditions index fell to 5.08 this month from 19.57 in June. Economists had expected a reading of 18.5 in July.

The Labor Department said the producer price index for finished goods fell 0.5% on a seasonally adjusted basis last month, more than the 0.2% fall predicted by economists.

However, weekly jobless claims decreased by 29,000 to 429,000 in the week ended July 10, bigger than the decline of 9,000 economists were expecting.

Stock futures had reversed early losses after J.P. Morgan Chase reported better-than-expected earnings. Shares of J.P. Morgan rose 0.9% in premarket trading after the bank's second-quarter net profit jumped 76%, with profit rising to $4.8 billion, or $1.09 a share, from $2.72 billion, or 28 cents a share, a year earlier. The bank saw improved net income in every line of business except investment banking, helped by a 23% reduction in reserves for loans unlikely to be paid back.

The bank's earnings helped lift European shares, which also benefited from news that the Spanish government sold $3.8 billion in 15-year bonds amid solid demand. The euro hit a two-month high, breaking above $1.28 to trade recently at $1.2841, up from $1.2735 late Wednesday in New York.

However, a cautionary note came from China, whose rate of growth cooled slightly. The country's second-quarter gross domestic product grew 10.3% over the same period a year earlier, slowing from the 11.9% annual growth recorded in the first quarter.

Among stocks in focus, AIG edged up 0.2% after its chairman Harvey Golub resigned, citing tensions with the giant insurer's chief executive Robert Benmosche.

Nutritional supplements company NBTY jumped 44% after private-equity firm The Carlyle Group agreed to buy the company in a deal valued at $3.8 billion.

Shares of drug maker GlaxoSmithKline gained 2.1% after a U.S. Food and Drug Administration advisory panel voted to recommend keeping the company's diabetes drug, Avandia, on the market despite concerns the product could raise the risk of heart attacks. The company also said it will record a chare of GBP1.57 billion in the second quarter to cover the cost of settling lawsuits.

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